Key Events In The Coming Very Busy Week

The coming week will be busy in terms of data releases in the US; highlights include an improvement in consumer confidence, anemic 1Q GDP growth, and solid non-farm payrolls (consensus expects 215K). Wednesday brings advanced 1Q GDP - consensus expected a pathetic 1.1% qoq, on the back of what Goldman scapegoats as "weather distortions and an inventory investment drag", personal consumption (consensus 1.9%), and FOMC (the meeting is not associated with economic projections or a press conference). Thursday brings PCE Core (consensus 0.20%). Friday brings non-farm payrolls (consensus of 215K) and unemployment (6.6%). Other indicators for the week include pending home sales, S&P/Case Shiller home price index, Chicago PMI, ADP employment, personal income/spending, and hourly earnings.

Outside of the US, the coming week brings consumer confidence and flash inflation in the Euro area; UK 1Q GDP; plus the BoJ meeting. Tuesday brings consumer confidence indicators in France and Germany, in addition to UK advanced 1Q GDP. On Wednesday Euro area inflation for April is expected to from 0.5% to 0.9% yoy. Later in the week we expect national business surveys (final April readings). In Japan the key event is the BoJ meeting on Wednesday. Consensus expects no change in policy (in line with consensus) as little post-VAT hike information will be available and the Governor made it clear in the last press conference that there was no need for further easing for now. The Outlook Report will also be published, which is expected to say the BoJ will adhere to its scenario for inflation to reach 2% by end-FY2014 (link).

In EMs, the coming week’s focus will be on the MPC in Israel and Hungary, Korean exports, China NBS PMI, and polls related to Brazil's elections. Among other releases or events, Monday brings Israel MPC, Tuesday brings Hungary MPC, Wednesday brings Taiwan and Ukraine advanced 1Q GDP, Thursday brings Korean exports and China’s NBS PMI (expected to print just modestly above last month's 50.3 to 50.4, balancing policy measures, exports rebound, and property sector drag). The week also includes inflation prints in Indonesia, Peru, and Thailand, among others. In the absence of major data releases in LatAm, market focus will likely center on polls related to Brazil’s election.

Geopolitical events related to the situation in Ukraine and Russia will likely attract heightened market attention. Following the escalation of the conflict over the past few days, the G7 agreed to impose new sanctions on Russia. The announcement of the specific sanctions could come as early as Monday, and markets are likely to continue focusing on related headlines. In turn, highlights of the week in terms of policy-maker interventions include BoJ’s Kuroda’s press briefing (on Wednesday), in addition to speeches by US Fed’s Chair Yellen and BoE's Cunliffe (on Thursday).

Hungary | MPC: We expect another cut in rates by 10bp (from 2.60% to 2.50%). We also expect the MPC to announce the end of the easing cycle and to use non-rate tools from now on to ease financial conditions, support lending to the private sector and demand for government bonds, and to anchor the yield curve.

Japan | MPC: The BoJ is expected to keep monetary policy unchanged. In the press conference following the previous meeting, the Governor stressed that there was no need for monetary easing for now, and given that few economic data in the wake of the VAT hike have been published yet, additional easing seems unlikely.